Why we need innovation and entrepreneurship in higher education

One of the most common questions I get from other faculty is: “Why is that university administrators are so focused on innovation and entrepreneurship?” I’m going to attempt to explain that, and here’s a spoiler – it’s not so the university can make money. Hopefully, that will be enough to entice folks to read this, because it’s a bit of a long argument.

When I was at UNC, I spent a lot of time building and improving the infrastructure for innovation and entrepreneurship and even wrote a book about it with Buck Goldstein. After I left, my successor has, if anything, amped all of that even more by naming a Vice Chancellor for Innovation and Entrepreneurship and accepting an award from Desh Deshpande as the best university for entrepreneurship.

When I came to WashU, Mark Wrighton asked me to do a lot of the same things here. I was frankly not wild about this request at first having ‘been there and done that’ at UNC. But, I dug in and started work on things and am glad I did. We got a terrific new director for the Skandalaris Center for Entrepreneurship, we launched a Quick Start license that has been praised by entrepreneurial faculty, we brought on Mike Kinch who is working with our biotech startups, and Dedric Carter who is coordinating all this as Associate Provost for Innovation and Entrepreneurship. Dedric and I recently talked about this in China.

So why do we do all this? These reasons are in ascending order of importance.

Because we have to. In 1980, Congress passed the Bayh-Dole Act that compels universities to use best efforts to ensure that research funded by the federal government is commercialized in a way that maximizes the benefit to the public.

To make revenue. Most people assume that universities do this so we can make money. We do make some money, but typically, universities make revenues that are 1-2% of the overall level of research funding, i.e., at WashU, we have around $600M/year in research funding and have had an average of around $6M per year in licensing revenue. It’s up some the last year, and hopefully we can sustain that, but unless you get a blockbuster drug that you own a lot of, it is unlikely for the amount of licensing revenue to rival the amount of research funding from the federal government. So, if this were just about the money, it would be a better investment to do more to help faculty get federal research grants than to invest in the licensing office.

To retain faculty. The faculty who commercialize their inventions do so because they want to. We can’t license inventions without faculty who are enthusiastic about helping us and helping the licensee. So, by definition, the licenses that get done are done because the faculty member sees licensing the invention as an important part of their work. Making the policies and processes as smooth as possible is an important part of facilitating the work of these professors and retaining them at the university.

To tell the story of our research. By far the most important reason for commercializing our inventions is to facilitate the narrative of research to the public and our stakeholders. I believe that universities – especially public universities that need state support for graduate education, but all universities who need to encourage federal research support – are losing the narrative as to why university research is important, and I also believe we can’t blame anyone but ourselves. We have to reclaim the narrative about the importance of research, and we’re going to need to get creative to do it. (For more on this, see congressional testimony from classicist Hunter Rawlings.)

Here’s where the logic gets a little cumbersome, but let’s think through four reasons why we do research and then think about how to talk to them to an outside observer. These four reasons are:

a. Because deep thought is a good unto itself. Most college professors, graduate students, and some undergraduates would readily embrace this as being sufficient reason to do research, but a general observer would probably not be willing to engage this reason quickly.

b. Because knowledge is a good unto itself. Again, no debate here from the academics. Most of what we teach in textbooks and K-12 originated in curiosity-driven research and if it is from the last 200 years or so, that means it was university research. An outside observer might be more willing to engage this reason than a.

c. Because the research of today provides the basis for future inventions. Most of the inventions that improve our world rely on research from the past. We can’t predict what knowledge will be useful to the inventors of the future, so if we stop doing basic research today, the inventors of tomorrow will not the basic knowledge they need to solve problems of the future. A wider audience can accept this.

d. Because our research is going to help you today. Some of our research is commercialized immediately and improves lives through health care or information technology. This is the research that is easiest to explain to an outside observer.

If I’m standing in line at the grocery store and the person in front of me in line asks if I work over there at the university, they often ask me what we do in all those big lab buildings and libraries. I don’t start with a. I start with d and try to work my way up. If I start with a, I’m not going to win them over. Same thing if I’m walking the halls of Congress.

The problem with this analysis is that it means that the conversation starts with the disciplines that have the most practical application. That excludes a lot of our faculty. Administrators have to make up for this by constantly articulating the importance of the humanities, social sciences, and basic science. (I try to do that – for example, here, here, here, and here – but always need to keep doing more.) We’ve all got to work together if we’re going to win back the narrative about research.